Irrevocable Trust | Asset Protection Attorney In Utah

Irrevocable Trust | Asset Protection Attorney In Utah

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Grantor.
The grantor is the creator of the trust and the person who is eligible to make gifts to the trust. You may serve as the grantor of your own trust, or you may ask a parent or another relative to establish the trust for your benefit.

Trustees.
The trustees control the trust and make decisions about investments and distributions. The trustees have a duty to follow the instructions in the trust or they can be held personally liable for breach of their duty to the beneficiaries. You may choose one or more trustees and you may give them equal powers or you may divide the powers and responsibilities of the trustee as you see fit. The grantor cannot serve as a trustee, but it is possible for a beneficiary to serve as a trustee. The trust document should name the successor trustees if the original trustees should cease or fail to serve, or it should include a formula for electing the successor trustees.

Beneficiaries.
The beneficiaries are the people who are eligible to receive benefits from the trust. You can name as many potential beneficiaries as you wish. You can define their rights in any manner, but it is usually best for asset protection purposes to limit the rights of the beneficiaries and give the trustees the discretion to determine how much or how little to give to the beneficiaries.

Trust Protector.
The trust protector is an independent person with special powers to watch over the trustees and ensure that the trust accomplishes its intended purposes. You may give the trust protector the power to remove and replace the trustees, to terminate the trust, to amend the trust to adapt to changes in the law, to divide the trust in the event of divorce, to eliminate a beneficiary from the trust, to add beneficiaries to the trust, and to exercise these powers with or without the consent of the grantor, the trustees, or the beneficiaries.

Governing Law.
You can generally choose the law that will govern your trust by designating the governing law in the trust instrument and by choosing a trustee located in the jurisdiction where you want the trust to be governed. Offshore trusts can provide excellent protection, but they tend to have a negative image that can do more harm than good. There is a vast difference in the laws of the different states and it is critically important to choose a jurisdiction whose laws are best suited to accomplish your purposes. For example, in many states, the ex-spouses of a beneficiary have a claim on the assets of the trust for alimony, support, and even property division in the event of a divorce. Other states specifically provide that a beneficial interest in a trust is not a property right and that distributions may be made in the absolute discretion of the trustee.

Distributions During Life.
I generally recommend that you leave the distribution schedule flexible during your life and allow the trustees discretion to make distributions among a large pool of potential beneficiaries at such times and in such amounts as they determine.
Distributions After Your Death.
Most clients leave specific instructions for the division and distribution of assets after their death. I generally suggest that you give the trustees discretion to continue the trust after your death, in order to protect your spouse and children from a remarriage, divorce, bankruptcy, or other unexpected liability. You can limit the rights of the beneficiaries in order to protect them from themselves, or you can give them the power to serve as their own trustee and distribute the assets to themselves as they wish.

Powers of Appointment.
A power of appointment is a power given to any person to change or re-write the requirements of the trust. You can give the beneficiaries or others broad powers to make changes, or you can give them limited powers to make changes within a certain group of beneficiaries. For example, you may give your spouse the power to make changes among your children after your death, but not the power to give all the assets to a new spouse.

Income Tax Treatment.
You may design your trust so that its income is taxable to you, to the beneficiaries, or to the trust itself. These are important decisions that should be made with the help of a qualified tax attorney. You may also design the trust with enough flexibility so that the income tax treatment can be changed from time to time. You may choose to have the trust income taxable to yourself for a time so the assets of the trust can grow tax free. This tax burn technique is a powerful tool for the elimination of estate taxes.
Read more: http://www.irrevocable-trust.com


About the Author:
Lee S. McCullough, III, PC
5255 N. Edgewood Dr., Suite 100
Provo, Utah 84604
(801) 765-0279

Email Address: trust.irrevocable@gmail.com

URL site: http://www.irrevocable-trust.com



Article Originally Published On: http://www.articlesnatch.com


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